How to use Personalized Catalog Selection to Improve Activation Rate in E-Commerce Marketplaces?
Personalizing catalog selection can significantly impact activation rates in e-commerce marketplaces, especially for new users. This concept explores how tailoring the product selection can nudge new users towards activation.
E-Commerce Core Drivers and Activation:
As discussed in the previous skilleton: in e-commerce, four core drivers influence customer decisions: price, variety, quality, and service. For activation especially, price and variety play more pivotal roles than other two factors. Strategies like first order discounts directly target this insight, which we covered previously.
However, for marketplaces, another subtle yet powerful tactic is to tailor the catalog that new users see. This involves strategically showcasing products that align with competitive pricing and varied options, enhancing the likelihood of activation.
Personalized Catalog Selection for New Users:
Marketplaces have a unique opportunity to personalize the catalog for new users. This personalization can be oriented towards showing products with a lower average price point, without compromising on variety, to encourage initial purchases.
For instance, a new user browsing an electronics marketplace might first be shown budget-friendly gadgets and cost-effective accessories, aimed at easing them into making their first purchase.
Experiment Design for Activation:
An effective strategy is to experiment and find correlations between the average view price of products (for the first few catalog views) and activation rates. This experiment should be designed to hold other factors constant, enabling a clear assessment of price impact.
A marketplace can analyze how different segments of new users respond to variations in average price points they see initially, helping to optimize catalog presentation for better activation rates.
If successfully implemented, average view price can be incorporated in the regular metric tracking as a leading indicator of activation rate.
Takeaway:
This approach of personalized catalog selection in e-commerce marketplaces, focusing on pricing strategies for new users, offers a nuanced way to boost activation. By understanding and implementing such tailored strategies, marketplaces can create more engaging experiences for new users, driving activation rates effectively.